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Appeals Court Upholds Idaho Law Protecting Fair and Open Competition on Public Construction Projects

Washington, D.C. - Associated Builders and Contractors (ABC) and ABC’s Inland Pacific Chapter today celebrated a victory when the U.S. Court of Appeals for the 9th Circuit set aside a lower court’s decision against an Idaho law that banned government-mandated project labor agreements (PLAs) on taxpayer-funded construction projects.

“The Court of Appeals decision is a win for taxpayers, advocates of fair and open competition, and efforts around the country to oppose costly and discriminatory government-mandated project labor agreements,” said ABC Director of Labor and Federal Procurement Ben Brubeck. “This law prevents Idaho officials from imposing union-favoring PLA requirements on taxpayer-funded construction projects. PLAs have a dismal track record of increasing costs, reducing competition, and discriminating against experienced construction companies and qualified local employees because they are not affiliated with a union.”

Idaho is one of 23 states to issue “government neutrality in contracting” laws restricting government-mandated PLAs, including 20 states that enacted legislation or executive orders banning PLA mandates since President Barack Obama’s 2009 pro-PLA Executive Order 13502.The Obama order encourages federal agencies to mandate the use of PLAs on large-scale federal construction projects and federally assisted contracts procured by state and local governments.

“The law is clearly settled: State governments are well within their rights to pass pro-taxpayer laws ensuring these special interest handouts are not welcome on construction projects in their states,” said Brubeck. “To date, every law attacked by Big Labor has been upheld by the courts. The Idaho decision is the latest failed legal effort by construction trade unions challenging state government neutrality in contracting laws. ABC will continue to defend free enterprise via legal and legislative efforts at the local, state and federal levels of government.”

The U.S. Court of Appeals for the 9th Circuit is the third federal Circuit Court of Appeals to uphold the right of a government entity to restrict government-mandated PLAs. In 2013, the U.S. Circuit Court of Appeals for the 6th Circuit overturned a lower court ruling and upheld Michigan’s right to ban government-mandated PLAs on taxpayer-funded construction projects. And in 2002, the U.S. Court of Appeals for the D.C. Circuit upheld Executive Orders 13202 and 13208 issued by President George W. Bush, which prohibited government-mandated PLAs on federal and federally assisted projects from 2001 to 2009.

Additionally, in May 2015, a federal court in the Eastern District of Louisiana ruled that Louisiana’s 2011 law banning government-mandated PLAs was neither unconstitutional nor preempted by the National Labor Relations Act. Similarly, the U.S. District Court for the Southern District of Iowa upheld a pro-neutrality executive order issued by Iowa Gov. Terry Branstad (R) in 2011. ABC filed supporting legal briefs in each of these cases.

Numerous studies show PLAs discourage merit shop contractors and subcontractors from competing for public construction contracts, thereby increasing costs to taxpayers and discriminating against the 94.7 percent of Idaho’s construction workforce that does not belong to a labor union. PLAs typically force contractors to hire most or all of their craft employees from union hiring halls; follow inefficient union work rules; hire apprentices exclusively from union apprenticeship programs; and pay into union benefit plans on behalf of employees, even if they have their own qualified benefits programs. PLAs force employees to pay union dues, accept unwanted union representation, and forfeit benefits earned during the life of a PLA project unless they join a union and become vested in union benefit plans.

West Virginia Gov. Earl Ray Tomblin (D) became the first Democratic governor to sign legislation banning PLA mandates on March 26, and Nevada became the 23rd state to ban government-mandated PLAs on June 9. Additionally, the Arkansas state legislature voted with unanimous, bipartisan support to codify a long-standing executive order banning PLA mandates into state law earlier this year.